LOANS TO BUSINESS

Assetz
Capital

After a quiet few weeks, this platform was really
busy in the lead up to Christmas with borrowers raising over £2.5 million after
a number of loans were drawndown.

4 loans currently require funding, 1 loan is being
drawndown today (Christmas Eve) and a further 2 are due to be drawn-down during
January. These have returns of 9.25% and 10% pa.

3 managed accounts protected by provision funds
with returns of 3.75% to 7% depending on accessibility.

Highlighted Loan: A property developer in the
South of England looked to raise £350,000 to convert a retail space into a
residential flat. The term of the loan was for 12 months and security was
provided by a first charge over the 6 flats and a debenture on rental income.
This provided a Loan to Value of just over 50% and investors received a return
of 9.5% pa. The loan was fully funded and drawndown in no time which was good
news for the borrower.

Platform News: Helpfully Assetz Capital now email their investors
when new loans are added to the site.

Holiday park:
Required £80k loan for renovations (C Rated – 11.6% return). Quite an up-market
park that hosts weddings – always a licence to print money and this was
confirmed by the profits in the financial summary.

Technology company:
Required almost £130k. Cash flow problem due to a late payment from a client. E
Rated loan offering 17.4% - hope the bill is paid.

Construction company
specialising in art installations: Just under £50k was required to fund
refurbishment of their premises (C Rated – 11.9% return).

Building contractors:
Required just over £50k for expansion. As they are London based, this seemed
like a reasonably safe investment (C Rated – 11.9% return).

Rejects:

Furniture supplier: Required
£63k loan for business expansion (C Rated – 11.9% return). Very short proposal.
Wanted funds for hiring staff and website development but no detailed plans.
Credit score also very low.

Importer of
electronic goods: Required £157.9k to import goods ahead of the Chinese New
Year. Been through difficult times after their main customer for e-cig products
went elsewhere but then said this accounts for only 1% of their product line.
Something didn't add up so this went for sale, a little reluctantly as this was
E Rated and offered a return off 17.7%.

Keepsake franchise:
Required £52k loan for relaunch. Blamed troubles on the economic crisis. I felt
they should have recovered by now. Also wasn't impressed by the products on
their website.

Wheeling and dealing: Having previously sold part loans at a
0.1% premium, I decided to push the boat out a little. Of the 3 rejected loans
above, I listed 2 at a 0.5% premium and the one for the keepsake franchise with
a 0.2% mark-up. Sales are listed on the Funding Circle website for about 2
weeks. The latter sold after 10 days but the 0.5% premium ones are still unsold
with 2 days to go before they are delisted. I will be trying again in the New
Year at a lower price.

Defaults: Although this site has scaled up to the point
where there are several loans defaulting each week, fortunately none of mine
were moved into this status over the past fortnight.

FundingKnight

Lent to Date: £28,646,500 – increase of £430,000 – 1.52% growth.

Two auctions were listed on Christmas Eve.

Highlighted Loan: An expanding firm of Financial
Consultants were looking to raise £50,000 to cover recruitment costs. The loan
is secured via Personal Guarantees from the directors and has a reserve
interest rate of 12% pa. An upbeat description of the company's activities was
provided although some concern was expressed in the Q&A about the number of
former businesses one of the directors has had in the past. The response was
that none of these had any outstanding debt when they closed. If I was active
on FundingKnight, I would probably have placed a small investment in this
company.

FundingSecure

Lent to Date: £17,761,624 – Figure updated at the start of each
month.

There were 2 loans available to invest in when this
blog was compiled.

Highlighted Loans:In their monthly newsletter at
the start of December, FundingSecure set expectations quite low with regards to
how many lending opportunities there would be in the run-up to Christmas
however the site has actually been quite busy. Even on 23rd December
there were two bridging loans looking to raise over £1.5 million in total then
at lunch time on Christmas Eve, a £15,500 loan was added to the site with
security provided by a variety of items including a 19th Century
clock and artefacts from the Titanic. All these featured loans return 12% pa.

The Pound in my Pocket:As the
offerings on this site are so popular, investors are restricted to a maximum
bid amount for the first 24 hours of each loan. In the past fortnight I have
purchased £100 worth of two loans and then sold half of the investments a week
later on the Secondary Market at 1% premium for a profit of £1! Hopefully,
these little bonuses will mount up over the course of time.

Platform news: There have been further tweaks to how the Secondary Market operates,
sellers are now prevented offloading part loans if prospective buyers would
make anything less than a 4% pa return.

Money &
Co

Lent to Date: £6 million approx. (latest available figure)

There were no auctions taking place when this
report was compiled however one ran for just 3 days in the middle of December
providing acquisition funding of £150,000 to enable the takeover of a training
establishment. The 3 year loan offered a return of 9% pa.

rebuildingsociety

Lent to Date: £8,567,425 – figure from 1 month ago. No updates
since.

There are 2 auctions active on this site.

Highlighted Loan: Midland based builder was looking
for £25,000 to expand into the North West. They already had a major contract in
place. I had one problem with this loan… it was already fully funded and no
further bids were being accepted when I viewed it.

ThinCats

Lent to Date:£145,859,000 – increase of £4,670,000 – 3.31%
growth.

This platform has had a really busy fortnight with
totals lent increasing by over £4.5 million

11 loans are available to invest in.

Highlighted Loan:With a return of 14.5% a loan to
purchase a restaurant offers one of the best returns seen on the ThinCats
platform. £150,000 is looking to be raised but this loan is preceded by another
loan that has first charges over the premises in question and the personal and
business guarantees. Capital and interest will not be paid until the loan
mature hence the high risk/reward.

Invest &
Fund

Lent to Date:Over £1 million

There was one auction listed that required funding.

Highlighted loan:A bridging loan for over £1
million to redevelop a property in London. Investors are offered a return of
10% with a LTV of 56%. There will be no capital or interest repayments until
maturity which is better news for the borrower than investors who have
everything at risk for the entire term.

Platform News: Invest & Fund have advised that a further 3
loans are in the pipeline.

LendingCrowd

Lent to Date: Over £3.7 million when the site last updated their
figures.

There was 1 auction taking place when this blog was
compiled.

Highlighted Loan:I invested in a Scottish Events
business looking to raise £95k of expansion capital. Their proposition was
superbly written and, as they had been given a C Band risk rating, I put in a bid
at 13.9% pa.

ArchOver

Lent to Date:£10,915,000 – increase £370,000 – 3.51% growth.

On Christmas Eve a regular borrower on the site – a
company providing credit to SMEs – was raising £200k via 2 loans that had a 1
year and 2 year duration. These were offering returns of 6.5% and 7.5%
respectively. This is less than loans on many other sites in this section of
the blog but the risks are also much lower as in addition to security via a
first, floating charge on the borrower's Accounts Receivable, the loan is also
insured.

The low risk is underlined by the
fact that no loans have defaulted on this site.

PERSONAL P2P
LENDING

Zopa

Lent to Date: £1.22 Billion
– increase of £20 million – 1.67% growth.

Returns:Interest rates are 3.8% to 5% depending on the
length of the investment. These are unchanged from a fortnight ago.

Ratesetter

Returns: Interest rates are set according to supply and demand.
They currently range from 3.2% to 6.1% depending on the length of the investment,
the former is slightly up on a fortnight ago.

Capital is covered by a Provision Fund. Ratesetter
proudly boast that no investor has lost a penny since they launched in 2010.

Platform News:The nature of the Provision Fund has changed from
being a discretionary trust to a legal company. This makes no change to the way
it operates but it does mean that it will be a more robust entity.

Lending
Works

Lent to Date:£18,615,800 – increase of £746,722 – 4.18% growth.

Lending Works is another P2P operator involved in
personal loans that has seen an impressive increase in totals lent over the
past fortnight.

Returns: 4.7% and 6.1% for 3 and 5 year investments
respectively – unchanged from a fortnight ago.

As well as a Provision Fund to cover investor's
funds, this site also insures borrowers against redundancy, fraud, illness and
accidents making this a very fair site for all concerned.

****Disclaimer: This
blog contains the views of the Secret Investor. Your capital is at risk when
lending via all P2P Platforms. You're recommended to speak to a qualified
Independent Financial Advisor.

Comment

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